7th Feb 2024 08:54
(Alliance News) - PZ Cussons PLC on Wednesday reduced its dividend and lowered profit guidance after performance was hit by the devaluation of the Nigerian naira.
The Manchester, England-based consumer goods company which owns brands such as Carex and Imperial Leather said revenue in the half-year ending December 2 fell 18% to GBP277.1 million from GBP336.9 million the year prior.
The firm reported a pretax loss of GBP94.2 million, swinging from a pretax profit of GBP40.5 million the year before. Loss per share totalled 10.84 pence compared to earnings per share of 5.90p last year.
PZ Cussons booked a foreign exchange loss of GBP88.2 million in the period relating to the devaluation of the naira which it said had a "significant impact" on its financial results.
It pointed out the naira fell by 51% between May 31 2023 and December 2 and that the devaluation accounted for GBP52.9 million of the revenue decline.
As a result, the company cut the dividend by 44% to 1.50p from 2.67p, believing it would not be "prudent" to make an unchanged payout.
The company said the naira has fallen more than 30% since the end of the half-year meaning full-year adjusted operating profit would be below previous guidance.
It now expects full-year adjusted operating profit, at reported rates of exchange, to be in the range of GBP55-60 million compared to a range of GBP61.5-68.2 million given in September.
On a constant currency basis, the financial performance was been more robust with adjusted operating profit growth of 17% and EPS growth of 9.0%. Like for like revenue grew 2.2% driven by price/mix improvements of 7.0% and a 4.8% decline in volume.
Shares in PZ Cussons slumped 14% to 110.40 pence in London on Wednesday.
By Jeremy Cutler, Alliance News reporter
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